Highlights from the 24th annual ALLEN REPORT,
a.k.a.
‘Who’s Who Among Land Lease Lifestyle Community
Owners/Operators Throughout North America!’

Well, it’s ‘out and about now’, having been distributed as a lagniappe in the January 2013 issue of the Allen Letter professional journal. The ALLEN REPORT is a 12 page Signature Series Resource Document, one of a dozen similar monthly SSRD research reports and directories prepared by PMN Publishing, for land lease lifestyle community owners/operators nationwide, and in Canada.

Here are highlights from the 24th annual edition of the ALLEN REPORT:

• The only chattel finance ‘light at the end of this decade long tunnel’, during 2012, was 21st Mortgage Corporation’s C.A.S.H. Program for LLLCommunities.

• MHI has new president & CEO (Dick Jennison) & NCC a new VP (Jenny Hodge)

• Half of original Daring Dozen investors are still, after eight years, going strong

• MHIndustry unity & national leadership at a tipping point? Maybe. You decide

• 25 Most Influential People in the MHIndustry Today! All named by their peers

• And much much more, for MHIndustry & LLLCommunity aficionados alike…

To order the 24th annual ALLEN REPORT; know that it is FREE to Allen Letter professional journal subscribers (i.e. Only $134.95/year for 12 monthly issues), OR for $500.00 per copy. To order, phone the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764.

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II.

More About MHI’s NCC Division’s Non – Meeting Plans

The Good News is, National Community Council’s elected chairman responded by email, to my inquiry and criticism regarding his summarily canceling the regularly scheduled biannual membership meeting of said MHI division, in Arlington, VA., during late February 2013. The Not – So – Good News, in my opinion? Well, here’s a key paragraph from said correspondence to yours truly. Read and decide for yourself, especially if you’re presently a direct, dues – paying member of MHI and or its’ National Communities Council division:

“The Executive Committee planning session will be closed other than for the Executive Committee and any invited guests. We don’t anticipate your participation. Similarly, while we expect to seek suggestions from a variety of constituents of all shapes and sizes either before, during or after the upcoming planning session, we don’t anticipate requiring your involvement. For the time being, this initial planning for the future of the NCC will, in fact, be placed in the hands of the Executive Committee and our work will be shared with the membership at the appropriate time. I’m sure you’re aware that most other large organizations plan effectively for the future in exactly the same manner.”

Yes, that’s how the paragraph was penned, including the redundancy, lack of punctuation, and obvious pompous tone.

Some observations. This is the first indication there’ll be individuals, other than the Executive Committee per se, who’ll be invited guests. That may be a good thing, maybe not, depending on who they invite. Wonder if we’ll (NCC members) ever know?

OK, OK, I get the message! “We don’t anticipate your participation.” & “…we don’t anticipate requiring your involvement.” It’s clear, this duly elected NCC board member is unwelcome to participate in the Executive Committee’s ‘closed planning workshop’. Be that as it may, “I plan to be in attendance at the MHI Legislative Conference.” Hmm. Wonder if I should plan an alternate educational activity for NCC members who, out of loyalty to MHI/NCC, plan to attend the February meeting? I can think of two ‘most appropriate alternative topics’ already. Let me know of your interest via MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. This could be fun….

And that last sentence. Sure, Executive Committee discussion, during retreats and other venues, is certainly one way to ‘plan for the future of the NCC’; but interestingly, for a national Advocacy body birthed by MHI on 1/1/1996, this is the FIRST & ONLY TIME, in my recollection, where duly elected (and appointed) officers have purposely cut themselves off from direct, dues – paying members and their input, regarding ideas, preferences, and suggestions regarding the present and future of the NCC council. So, if nothing else, the Executive Committee is ‘making history’ of themselves.

Frankly, I and others believe, this ‘closed planning workshop’, in lieu of the regularly scheduled biannual NCC meeting, is simply a subterfuge. And those council and audience members present at the NCC meeting on 8 October 2012, in San Antonio, TX., likely understand why. The cowardly public verbal ambush of two NCC members, for alleged offences not documented to this day, and who were not given opportunity to defend or rebut said charges, remains unresolved! So, a ‘closed planning workshop’, again – in lieu of a regularly scheduled membership meeting, is just one way to – like the U.S. Congress – ‘kick the can down the road’, settling nothing.

III.

POWER Networking Luncheon Attracts 70+ Attendees!

…and fully half of them, by a show of hands during lunch, and from responses penned on Event Evaluation Forms turned in following the luncheon, indicated they were either 1) attending their first Louisville MHShow, or 2) deciding to participate in the POWER Networking Luncheon opportunity, convinced them to travel to the KY Fair Grounds for the event this January!

‘LOL’ A humorous sidebar to this event, was the presence of a couple 2’WX3’H bright yellow signs near the MHShow registration area, warning readers, ‘George Allen’s POWER Networking Luncheon is not part of the official MHShow program’. Well guess what? As we were seating an already capacity crowd of 60 registrants at the luncheon, another ten individuals showed up, half indicating they’d read the (above) signs and decided the POWER Networking Luncheon was where they really wanted to be! So a ‘Thanks’, of sorts to the lone show vendor who spent good money to negatively promote this ‘more than sold out’ event. Lessons Learned? ‘Bad publicity is better than no publicity at all!’ & ‘Turn a lemon (yellow sign) into lemonade (luncheon fees)!’ ‘LOL’

• Ken & Donna Rishel, the manufactured housing industry’s Power Couple, held the rapt attention of their two Open Discussion Groups, as they walked them through the morass of increasing Federal and state finance regulations. Want more information about their $ workshops and freelance consulting services? Phone (217) 971-3968.

• Michael Power, flew up from Florida, to once again hold forth on his popular ‘How to Collect 100% of Your Site Rent 100% of the Time!’ methodology. To request a copy of Michael’s handout, phone (305) 879-3776 & ask about his freelance consulting services for land lease lifestyle community owners/operators.

Another ‘bottom line’ had to do with the Surprise Special Speaker on the Program. It was ‘yours truly’. And the POWER Networking Luncheon achieved its’ ‘historical significance’ as the first public venue at which the birthing of a new, national, not for profit entity, to serve the ‘statistical Research & ongoing Resource servicing’ of land lease lifestyle community owners/operators, coast to coast, and maybe Canada, was announced! Still tentatively known as the Manufactured Home Community Owners Association of North America, or MHCOA in short, the entire presentation will be shared, first with subscribers to the Allen CONFIDENTIAL! business newsletter, then in the Allen Letter professional journal. Already, in excess of 100 businessmen and women have committed to join the new Research & Resources entity; have you? If seriously interested, simply phone the above referenced MHIndustry HOTLINE or via gfa7156@aol.com Details to follow. Pivotal date = likely 2/27/2013. Are YOU on board?

There’s yet another ‘bottom line’ to this superbly successful POWER Networking Luncheon. And it has to do with state manufactured housing associations throughout the U.S.. If you’d like to bring this tripartite, half day program to your state (Either morning or afternoon, including breakfast or a luncheon), know all four presenters are willing to address your members, given scheduling compatibility, for reimbursement of travel – related expenses! Three of the presentation topics are listed in the previous paragraph. What’s the fourth? That’s up to you and what your members need, e.g. ‘State of the MHIndustry & LLLCommunity Asset Class’; ‘How to Calculate Affordable & Risky Price Points for New & Resale Homes Going into LLLCommunities or onto Private Property Conveyed Fee Simple’; or, ‘How to Sell More Homes into Land Lease Lifestyle Communities!’ – latter message addressed primarily to HUD – Code home manufacturers and independent ‘street’ MHRetailers and ‘company stores’. If interested, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. This could be the very best program you offer your members all year long! Think about it – and call….

“The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston…” Google Search
-meanwhile-
The manufactured housing industry’s businessmen and women routinely engaged in turning our (home buying) customers ‘upside down’ financially, using a variety of housing finance shenanigans, a.k.a. predatory lending measures.

The adjective ‘enronesque’ has since been spawned by the aforementioned Enron scandal; and to this day, ‘relates to accounting methods meant to deceive, accounting legerdemain spun to make something seem affordable.’ Housing maybe?

Frankly, it’s a minor miracle ‘enronesque’ hasn’t been applied before this, to manufactured housing industry financial shenanigans that, in large part, caused us to lose our independent, third party sources of chattel (personal property) finance; and, in lesser part, why those resources haven’t returned, en masse, to this day.

Remember business life back then? At the turn of the 21st Century, specifically 1998, when during our brief renascence, the HUD – Code manufactured housing industry shipped 372,843 new, mostly Developer Series Homes (a.k.a. ‘Big Boxes = Big Bucks’), to compete head to head, as land and home packages – for increased local housing market share – against production site builders.

As a rule, we sold customers ‘more home than they could afford’, accepted false or inaccurate loan applications, encouraged phantom and insufficient mortgage down payments, and engaged in underwriting ARMs (adjustable rate mortgages) with flagrant interest rate swings, and too often, arranged for the installation of these behemoth new homes in (then) manufactured home communities, ‘rent free’ for periods of time.

Yep, this sad period in our industry’s history, when independent ‘street’ MHRetailers, and company stores alike, espoused this mantra: ‘We have no $$$ down, no job, no problem deals for you!’, deserves this label:

Manufactured Housing’s Enronesque Period, circa 1994 – 2002

And it will be so – labeled next time the Signature Series Resource Document, ‘Paradigm Shifts of Mobile & Manufactured Housing’ (subtitled: ‘Serving shelter needs of the newly wed & nearly dead for seven decades’) is updated (November 2013), and distributed as a lagniappe in the Allen Letter professional journal. To subscribe, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

II.

What? No Meeting of the National Communities Council?

As a direct, dues – paying member of the Manufactured Housing Institute and its’ National Communities Council division, my firm pays $500.00/year as a land lease lifestyle community owner/operator. And I’ll pay a near like amount to participate in MHI’s annual Legislative Conference in late February. And let’s not forget the hundreds of dollars in annual dues we pay to Indiana and Illinois Manufactured Housing Associations ,’just to be eligible’ to be a direct, dues – paying member of the national Advocacy body. And NOW I learn there will be NO opportunity, during MHI’s annual Legislative Conference, to meet and network with fellow NCC division members in Arlington, VA @ 25 & 26 February. Where’s the dues value in that change of plans?

WHY no meeting? Following passage is quoted, in part, from email correspondence received from the division’s chairman, on 16 January – a week and a month before many of us expected to convene in Arlington, VA., for the first time since MHI’s annual meeting, and NCC’s debacle meeting on 8 October 2012, in San Antonio, TX.

“In lieu of the NCC business meeting that has been held traditionally in
conjunction with the MHI Legislative Conference and Winter Meeting, at the
upcoming meeting, the NCC Executive Committee will instead hold a closed
planning workshop focused on solidifying the NCC’s vision for the future. Our
goal will be to define a vision that ensures the NCC supports MHI’s broader
legislative advocacy and marketing outreach efforts, provides the range of
services most valuable to the variety of constituents we represent, makes interim
NCC meetings more productive for all our members, and expands our
membership to add to our resources and strength as the only MHI division
representing community owners.”

Don’t know ‘bout you, but the first of several questions this paragraph raises, is this:

Why didn’t NCC Executive Committee hold a ‘closed planning workshop’ between its’ last meeting during October 2012 and now, so it’d be ready and able to communicate its’ ‘vision for the future’ in late February in VA?

Know what this selfish pre empting of the ‘traditional’ February meeting means to those of us who are faithful attendees (As a related aside, I’m an elected NCC board member, but do you think we’ll be invited to this Executive Committee soiree? Nope.)? We get to wait until the next NCC meeting, probably next Fall at MHI’s annual meeting, unless there’s’ an interim NCC meeting during the MHCongress in Las Vegas this coming April.

You probably noticed the four part goal contained within the quoted paragraph. Broken out, the parts are:

• “…define a vision that ensures the NCC supports MHI’s broader legislative advocacy and marketing outreach efforts…” That’s pretty much ‘business as usual’, based on my not having missed an MHI/NCC division meeting in years.

• “…provides the range of services most valuable to the variety of constituents we represent…” One can only hope, between now and this ‘closed planning workshop’, the Executive Committee reaches out to its’ members, including ‘yours truly’, and asks: What ‘services (are) most valuable to me as a land lease lifestyle community owner/operator?’ Think that’ll happen? Wait and see. But given the MHIndustry’s penchant for designing, building, and shipping homes to ‘then sell’, rather than the other way around; my guess is we’ll wind up being told what ‘services (are) most valuable to me as a LLLCommunity owner/operator.’ That too, sad to say, is pretty much ‘business as usual’ for this group.

• “…makes interim NCC meetings more productive for all of our members…” Hmm. What’s the ‘diff’ between an interim and a regularly scheduled NCC meeting?

• “…expands our membership to add to our resources and strength as the only MHI division representing community owners.” Now this is a cute one. An obvious call for more dues revenue; but what are direct, dues – paying LLLCommunity owners/operators, like you and me, receiving in terms of benefits, from NCC membership? National advocacy, for sure. But what else? Non – meetings like this one in February 2013?

At this point, I’d like to ask the following question of NCC’s Executive Committee:

It’s pretty well known throughout the land lease lifestyle community realty asset class, MHI’s NCC division effectively handles the national Advocacy needs of its’ unique, income – producing property type members. But what about the plethora of other products and services LLLCommunity owners/operators presently enjoy, from other sources, and not presently provided by MHI’s NCC division?

STOP HERE! Originally, the plan was to list ‘right here’, those needed products and services, some think should be available via MHI’s NCC division. However, several LLLCommunity owner friends advised ‘not to do so’, likening the matter to ‘beating a dead horse’ where this national body is concerned. So, to switch the subject…

There’s concern today’s NCC division has become a ‘Big Boys (largest property portfolio owner/operator dominated) Club’, given No representation on its’ present Executive Committee, by sole proprietors and smaller property portfolio owners/operators. There’s serious concern this imbalance bodes ill for small businessmen and women, where present and future NCC Advocacy decisions – as well as Research& Resources, if or when taken in – house at the MHI/NCC, might be concerned. This issue deserves to be soon addressed, but not in a ‘closed planning workshop’ attended by the division’s executive committee and a few invited guests.

And let there be no misunderstanding. I plan to attend MHI’s annual Legislative Conference in late February 2013; and if NCC’s Executive Committee wants to meet with me before, during, or after their ‘closed planning workshop’, I’ll do my best to be accommodate them.

III.

MHInitiative®, Second Generation Workshop, & More…

Let’s hold this off until maybe next week. Many who’ve been responding to this blog of late, have inquired as to when and where there’ll be a FOCUS Group meeting this Winter (i.e. a 1 ½ day regional gathering of LLLCommunity owners and senior executive property managers addressing five key operational topics they select); and, what plans there are afoot for an industry wide MHInitiative®. In this latter instance, MHInitiative® plans are ‘on hold’ until we learn what, if anything, unfolds from MHI’s NCC division’s ‘closed planning workshop’ in late February, and the anticipated emergence of the Manufactured Home Community Owners Association of North America, or MHCOA in short, around that same time…think 27 February 2013.

Others of you, have been asking us to plan and host a one or two day program, dealing with Business Succession Planning, for second and third generation owners/operators of land lease lifestyle communities. If this topic is a ‘hot button’ for you and your family, let me know via email: gfa7156@aol.com or the aforementioned MHIndustry HOTLINE. It continues to be ‘simply amazing to me’ that none of our present day national bodies appear to be sensitive to not only routine, but special needs (like this one) on the part of their constituents, industry and nationwide.

For a multifamily rental property type that’s been around for 70 years, land lease lifestyle community (a.k.a. manufactured home community) contemporary history ‘first blossomed’ 20 years ago, during 1993.

Prior to 1993, national advocacy decisions were handled by an ad hoc committee, during Manufactured Housing Institute meetings. But when rumors of IPOs (initial public offerings of stock), pursuant to REIT (real estate investment trust) formation, became commonplace, it was generally agreed national advocacy would be in need of marked and formal improvement.

Prior to 1993, only one book had been authored during the preceding two decades, describing any aspect of mobile home park operations. And that was Mobile Home Park Management, self – published in 1988 by PMN Publishing in Indianapolis, IN. Six years later, in 1994, J. Wiley & Sons debuted Development, Marketing & Operation of Manufactured Home Communities. Both books ‘sold out’ within six months after being released. Since then, the first book has gone thru six updates and is now titled, Landlease Community Management. The second tome, long out of print, and considered by many to be an industry classic, continues to be available via PMN Publishing and Amazon.com. Point? Prior to 1993, HOW TO information, along with benchmark operating statistics re the LLLCommunity asset class, were exceedingly difficult to find.

Prior to 1993, two print trade publications, the Journal – which is still in existence, and the Manufactured Home Merchandiser magazine (now defunct) were unabashedly ‘HUD – Code home manufacturing & retail sales oriented’. No question about it, and no apologies offered. When I started writing columns, for both publications, during the late 1980s & early 1990s, it was understood they were token nods to the realty segment of the MHIndustry. Since that time, other trade pubs have come and gone, e.g. Modern Home and Community Management. The Allen Letter professional journal (1991) and the Allen CONFIDENTIAL! (1999), both subscriber – supported newsletters; along with a few online ezines, feed our appetite for industry and asset class information.

Prior to 1993, little to no professional property management education. While MHI’s Manufactured Housing Education Institute’s (‘MHEI’) Accredited Community Manager® or ACM® program debuted in 1991, it took a couple years to reach its’ potential; and in 2001, was joined by PMN Publishing’s Manufactured Housing Manager® or MHM® program. Today, PM training & certification programs are in place – but not utilized nearly as much as they should be, given 50,000 LLLCommunities nationwide. This sad situation has not improved much at all since 1993.

So, what’s the big deal about year 1993? Well first; know two separate resources, birthed in successive years, combined to create a third decisive occasion benefiting the entire specialty property type! In 1989, the ALLEN REPORT (a.k.a ‘Who’s Who Among LLLCommunity Portfolio Owners/operators in North America!’) replaced Roulac’s Strategic Real Estate ‘List of 25 Largest Mobilehome Park Owners in the U.S.’ And the following year, nearly 100 ‘mobile home park owners’ convened in Clearwater Beach, Florida, for the first of 21 annual International Networking Roundtable events. And subsequent to that first meeting, this idea was birthed…

Bringing us to 31 August 1993. While details of the historic event, formation of the Industry Steering Committee, or ISC, predecessor to MHI’s National Communities Council (‘NCC’) division, is recounted in Appendix G of How to Find, Buy, Manage & Sell a Manufactured Home Community (J. Wiley & Sons, 1996), a summary of those events follows here. That day, 19 owners/operators of (then) manufactured home communities met at an airport hotel in Indianapolis, IN. Among the 19, were executives from all the firms that’d launch IPOs during the next two years: MHC, Inc. (today, ELS, Inc.); Sun Communities, Inc.; Chateau Properties, Inc.; ROC Communities, Inc. (latter two eventually merged). And UMH Properties (then, United Mobile Homes), already a REIT – from the 1980s, was also present, as were a half dozen other private and corporate property owners. Following that watershed meeting, several additional Task Force gatherings convened at locations around the U.S., culminating, on 1 January 1996, with MHI forming the NCC (now division), to formalize national advocacy in behalf of land lease lifestyle communities nationwide.

So, year 2013 commemorates the 20th anniversary of LLLCommunity owners/operators ‘taking control of their collective future’, and laying the groundwork for representation and advocacy they’d need as several property portfolios ‘went public’. Year 2013 also marks the 17th anniversary of the NCC division proper. And for those reading this history, but not yet direct, dues – paying members of MHI and its’ NCC division, know that the next biannual meeting is 25 & 26 February in Arlington, VA. For membership and meeting information, phone (703) 558-0666 or 0678. And tell’em ‘George sent me!’ Hope to see you at the meeting in late February….

As a related aside, the RV/MH Heritage Foundation has been approached about effecting some sort of formal commemoration of this 20th anniversary, so important to owners/operators of land lease lifestyle communities. Perhaps special mention will be made of the Industry Steering Committee, and its’ 19 Pioneer attendees (most of whom have now retired or died), at the 2013 Induction Banquet honoring Hall of Fame inductees, during August 2013. Guess we’ll have to wait and see….

OK, here’s what I like about the overall newsletter cum booklet. There are no fewer than nine feature articles, penned by several attorneys (West of the Mississippi, they’re ‘everywhere’!), representatives from three national Advocacy bodies, one erstwhile land lease lifestyle community manager, one LLLCommunity owner, and MHCA’s president, Neal Haney, owner of NTH Management, a fee management firm.
There’s good substance buried within most of these articles, but you must ferret it out…

For example: Attorney Michael A. Parham’s piece, ‘A Dystopian Future for manufactured housing?’ Where dystopian is ‘…a society characterized by human misery, squalor, oppression, disease and overcrowding.’ His final paragraph reads, “I am gloomy about the future but still have some optimism that with innovation and hard work this industry can survive and perhaps prosper. But we need to recognize what is happening around us and be nimble enough to act to avoid the bad consequences and take advantages of opportunities presented by all of these new developments.” (Evidently, attorneys don’t use commas in AZ. GFA)

For example: Erstwhile property manager L.A. ‘Tony’ Kovac pens: “A well known, successful community operator has told me that if we aren’t careful, the land lease MH Communities of today will turn back into the corn fields, will be bought out by big box stores or ‘higher and better use’ developers. We have natural advantages because we do offer quality, affordable homes and living. But that doesn’t mean that we don’t have threats.” And he goes on, to rightly decry subsidized housing. Other threats?

For example: Attorney John A. Buric reminds us: “A segment of our industry will also continue to cater to lower income individuals, providing necessary housing to those who might otherwise be unable to afford decent housing. While many outsiders tend to bash our industry and some of its low end housing, the reality remains that such communities are an economic necessity and provide housing to individuals who could not otherwise afford a decent place to live.” How many times do we forget that perennial truism?

Here’s where & how I think MHCA can improve on this project, in the event they decide to perform this valuable service for the manufactured housing industry next year.

• Decide on a theme, like you did this time around, but solicit a more heterogeneous group of writers. While MHCA is a land lease lifestyle community owners’ trade association, only two of the nine articles are authored by 1) a bona fide LLLCommunity owner; and, 2) owner of a highly respected fee management firm specializing in this unique, income – producing property type. In my opinion, half the articles should be written by community owners/operators and HUD – Code home manufacturers. The other half? Industry advocates again, and certainly representatives from the chattel and real estate – secured finance (mortgage) segments of the manufactured housing industry.

• Hire a proofreader and content editor to polish all submissions! There were grammar, word choice, spelling, and punctuation issues within every article, e.g. missing commas, too many ‘that’ words, etc.. Also consider terminology alternatives and give writers an Approved List to use. In this year’s debut pub, nine variants were used to describe our unique, income – producing property type: ‘communities’ (Here Haney & Buric have the right idea); manufactured home community; manufactured housing community; parks; land lease lifestyle communities; and, one writer used three variants interchangeably: MH Communities, Land lease MHCs, and MHC’s. And, in my opinion, drop the use of ‘dealer’ next year in lieu of independent ‘street’ MHRetailer, and maybe ‘company stores’ (to differentiate manufacturer – owned sales centers from the former). Also prefer use of ‘resident’ and or homeowner/site lessee instead of tenant, and rental homesite or site, instead of lot, pad, stall, or worse.

• And there will be missteps, no matter how careful one parses, that slip by unnoticed. For example; in the MHARR piece, this statement is made: “What is needed…is dedicated, independent, national representation of the post production sector to effectively advance its’ interests in the nation’s capital (sic) – working in cooperation with the (home) producers’ national representation….” (author’s underlining) This is an obvious call for national advocacy association reorganization. Yet, when given an opportunity to advance said cause, two months after those lines were penned, the author waffles, claiming a subsequent change in priority.

Know what MHCA’s ‘The Future of Manufactured Housing’ issue reminds me of (excusing the dangling participle)? How ‘years ago’, the short – lived slick print trade publication, Community Management, prepared and distributed an annual compendium of Best Articles Published That Year, including some new material, regarding all aspects of (then) manufactured home community ownership and management. And there’s an interesting coincidence to be found in that comparison: both publications were researched and prepared by manufactured aficionados domiciled in Arizona!

III.

MUSINGS

Originally thought it was just me, but have since learned there’re many ‘skin in the game’ businessmen and women around the country who observe and think similarly about contemporary issues, disturbing trends, and more; all affecting the manufactured housing industry and land lease lifestyle community asset class. In no particular order or priority or emphasis, here’re those we’ve been seeing and pondering most of late…

Talking about ‘fair value propositions’, relative to homeowner/site lessees living in LLLCommunities, and enabling this to occur, is difficult if not impossible to ensure, when the property owner/operator touts a Maximize Profitability business model (i.e. ‘maximize – rental – income & minimize – operations – expenses’). Bottom line? Either enable ‘fair value propositions’ for one’s homeowner/site lessees, or stop boasting about the matter among your peers!

The sad disconnect, between word and deed, by national elected leaders talking ‘industry unity’ out of one side of their mouth; yet through inaction, encouraging the birthing of at least one, if not two, new national, not for profit manufactured housing – related trade bodies. Can’t help but recollect a similar scenario in 1985, when a group of disenchanted HUD – Code home manufacturers split from the Manufactured Housing Institute to form the Manufactured housing Association for Regulatory Reform. Paraphrasing a pair of oft – quoted, and related, aphorisms: ‘Those who fail to learn from the errors of their past, are likely to repeat them; and at greater cost, the second time around.’

The ol bugaboo of family leadership slippage, usually between first generation entrepreneurs and their adult children, when risk – taking and passion often wane in the face of business school acumen, fuzzy OJT, or some other supposed leadership education by osmosis. Time in the military, especially as a junior officer, oft helps here; unfortunately, most today do not go that route. A solution? Too little too late for many of you, but ‘Cut em loose for a year or two’, then see if they come back around, 1) more appreciative of their family’s business heritage, and 2) ready to be passionate, risk – taking, responsible business leaders! Of course, ‘the downside(?) risk’ is they find career fulfillment elsewhere and don’t return. I twice learned that lesson, first as a son, later as a father. But know what? In retrospect, I’d not have the matter evolve any other way….

Would be trade journalists unable to move beyond ‘throwing enough stuff against the wall – to see what might stick’, should focus attention and effort on business topics their prospective readers need and desire to see and learn, and less on opinion and editorializing, in print and online. Unfortunately, it appears the trendy need for ‘immediate gratification’, in all areas of life, has supplanted good old fashioned research and word smithing before publishing!. But there’s an opposite extreme as well. Trade columnists writing for pubs that boast of ‘using writers to fill white space among ads’. Geesh. How many ways can a columnist describe, over a period of 20 years, ‘HOW TO install skirting on a manufactured home’? Maybe that’s why readership is down.

How pimping a present day business relationship – or a potentially profitable relationship foreseen in the future, can trump doing the morally and organizationally right, albeit difficult thing to do today, given one’s position as an elected leader of a national body. But as they say, ‘What goes around comes around’. Just sad to say; it’s already happened on our watch.

IV.

2013, a Breakout Year? Maybe if…

Attention all C.A.S.H. Program Aficionados! As you’ll soon read in the 24th annual ALLEN REPORT, January 2013 marks the one year anniversary of the birthing of 21st Mortgage Corporation’s bold, symbiotic, new home purchase and chattel finance program; you know, the one that’s WOW – WOW – WOW for our home buying/site lessee customers, the land lease lifestyle community owner/operator, and the mortgage finance firm!

Well, a number of land lease lifestyle community owners/operators, knowing Spencer Roane, MHM®, David Funk, MHM®, and I, this time last year, worked with Matt Kerlin and Lance Hull, of 21st Mortgage Corporation, to establish the basics of 21st Mortgage Corporation’s exciting C.A.S.H. Program, have been inquiring about the possibility of getting together and talking about the progress, Lessons Learned, and more, during the Louisville MHShow in KY, during 23 – 25 January 2013. Informally, several of us have agreed to attempt to do so. So, to express ‘your interest’ in being part of an informal get together, contact Spencer via (678) 428-0212. We already know of C.A.S.H. Program users coming in from both coasts, as well as from throughout the Midwest.

And get this, learned just this week of yet another new chattel finance program is in the offing, maybe even during the aforementioned Louisville MHShow! This one, modeled somewhat after the C.A.S.H. Program, does not require $ participation by the LLLCommunity owner/operator, and applies only to lease – option and true lease agreements, relative to new and resale homes sited within LLLCommunities! Watch this weekly blog for further details. And if you see me at the MHShow in Louisville, ask me for more information then….

Will year 2013 be a breakout year for HUD – Code manufactured housing? Depends on a number of factors, for sure; but with the appearance of new and exciting finance programs, like the ones just described (2012) and hinted at (2013), we’re close to being ‘on our way back’ to increased home shipment volume!

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POSTSCRIPT.

The 24th annual ALLEN REPORT is in the process of being distributed to hundreds of Allen Letter professional journal subscribers nationwide! Will you be among those receiving this seminal document during the next couple weeks? If not a paid newsletter subscriber (only $134.95/year), phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 today to subscribe. OR, buy single copy of ALLEN REPORT for $500.00.

SPECIAL ANNOUNCEMENT.

If interested, and not already registered to participate in the POWER Networking Luncheon, at the Crowne Plaza Hotel in Louisville, KY, @ 11:30Am – 2:30PM on 23 January, either phone the above – referenced MHIndustry HOTLINE; or better yet, print off the attachment to the BEBA (Blast Email Blog Alert) bringing you this posting, complete it and FAX it back to us ASAP via (317) 346-7158. Why is all this So Important? Because we expect to attract 75+/- land lease lifestyle community owners/operators to attend the Louisville MHShow for the very first time – to see Community Series Homes (or CSH Models) on display, and visit dozens of supplier booths, the afternoon after the luncheon and all day on the 25th of January. How can YOU not want to participate in this multipurpose occasion and event?

Recently, while researching party games, bar tricks, brain teasers, and other amusements, I came across a poetry game titled ‘Exquisite Corpse’, intended for three or more players.

It goes like this: ‘Each player writes an article and an adjective on a sheet of paper, then folds the paper in half, to cover the two words. Players exchange folded papers, unfolding the one received, and adding a noun to the paper before refolding it. Players repeat the procedure (exchanging folded papers), adding a verb; then again, with yet another article and adjective. And the next exchange involves adding yet another noun. Players exchange papers one last time; with each one reading aloud, to the general bafflement of everyone: the ‘article, adjective, noun, verb, article, adjective & noun’ written on the paper just received!’ From The Dictionary of Wordplay, by Dave Morice, Teachers & Writers Collaborative , NY, 2001, page # 68.

What got my attention about this game, besides it being a creative writing exercise, was the unintended, but near unmistakable, not so funny parody (usually a ‘humorous imitation’) of the manufactured housing industry, late in the 20th Century, and now, early in the 21st Century.

It goes like this: ‘Three or more HUD – Code home manufacturers independently design, build and ship lines of new homes, with little to no market research input from prospective homebuyers in local housing markets where the homes are to be sold. (This is, by the way, how the industry ‘keeps score’, by counting the number of new homes ‘shipped’ rather than ‘sold’ beforehand). They then maybe make adjustments to these home designs, and how/where they’re marketed, based on perceptions that may or may not have basis in reality and or practicality, e.g. the land – and – home package (i.e. ‘big boxes = big bucks’) debacle of the late 1990s; followed by a supposed ‘return to the roots of affordable housing’ (i.e. ‘smaller boxes = smaller bucks’); even the Community Series Homes or CSH Models wavelet of the past five years, to whet and feed the appetite of land lease lifestyle community portfolio owners/operators for new homes, to fill their share of an estimated 250,000 vacant rental homesites nationwide. The ‘exquisite corpse’? A mishmash of home designs and local marketing ploys, based on the creativity and perceptions of said home manufacturers, more so than the ‘needs& wants’ of the customers they seek to sell and serve!

Proof? When was the last time you saw a 30 second ad on any major TV network during prime time, advertising any manufactured housing brand of home construction? It simply doesn’t happen in our line of work, sad to say.

Of course, the often debated role – or absence of, chattel (personal property) finance, since the turn of the Century, also plays a critical role in the word picture painted in the previous paragraph. And, if interested, you’ll find a succinct, comprehensive commentary on that very topic, in the soon to be released (January 2013) 24th annual ALLEN REPORT.

Want to obtain a copy of the 24th annual ALLNE REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’? Well, it’s FREE with your paid subscription to the Allen Letter professional journal ($134.95/year = 12 monthly issues – each containing a different but valuable Signature Series Resource Document, e.g. annual National Registry of RE & Chattel Lenders, ‘Who Ya Gonna Call? List of Freelance Consultants’, etc.); or, for $500.00 per standalone copy. To order, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. By the way, this year’s 24th ALLEN REPORT also features a first time ever published list of ‘25 of the Most Influential Individuals in the Manufactured Housing Industry & Land Lease Lifestyle Community Asset Class’. All named individuals were recommended by their peers!

II.

Inquiring Minds Would Like to Know…

Questions that might not yet be keeping us awake at night, but ones that do make us routinely wonder, ‘Is anyone listening?’:

As many prepare to attend this year’s series of manufactured housing shows in Louisville, Tunica, and elsewhere, The Question that begs answering is this: ‘Given the real need (i.e. an estimated 250,000 vacant rental homesites in land lease lifestyle communities throughout the U.S.), and existence of Community Series Homes (a.k.a. CSH models, designed for in – LLLCommunity siting) from most major HUD – Code home manufacturers, WHY do the majority of new homes on display at said shows continue to be ‘big box = big bucks’ Development Series Homes that, in part, helped bring the manufactured housing industry to its’ knees, annual shipment count wise, at the turn of the 21st Century? That’s 13 years ago, and we still haven’t ‘changed our stripes’, nor have annual shipment numbers of new homes built, improved one iota. Why?

National Advocacy. ‘Are we getting our money’s worth?’ – dues and PAC Fund wise, by continuing, after 27 years, to support two somewhat overlapping national, not for profit, manufactured housing trade entities in and near our nation’s capitol? This is not, by any means, the first time this vital question has been raised from and among the businessmen and women grassroots of the HUD – Code manufactured housing industry. Or, ‘is there a better way’ on the horizon? Possibly, one overarching national body, Advocating the interests of all segments of the MHIndustry, including the land lease lifestyle community realty asset class; or two: one representing all HUD Code manufactured housing production & distribution segments of the industry; another representing all the real estate development and investment – related segments. Hmm?

Given the unique nature and circumstances of 21st Mortgage Corporation’s C.A.S.H. Program, (i.e. filling vacant rental homesites in land lease lifestyle communities with Clayton Homes purchased and mortgaged by 21st, in partnership with the property’s owner/operator) when will other independent, third party chattel finance firms (e.g. Triad, CU Factory – built Housing, & U.S. Bank – Manufactured Housing Finance) roll out similar LLLCommunity – friendly programs? Ask them!

Another question, related to the topic in the previous paragraph, has to with your firm’s chattel lending program, on – site and otherwise. Is it fully compliant with today’s plethora of onerous financial regulatory measures, e.g. relating to the S.A.F.E. Act, Dodd – Frank Legislation, AML, and more? As most already know, there’s ‘only one game in town’, at present, to teach manufactured housing – related compliance, and that’s via Rishel Consulting @ (217) 971-3968. Believe me; I wish there were additional credible resources to mention here. If there is, let me know via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or gfa7156@aol.com

Has the time arrived to seriously consider founding a national captive insurance entity for land lease lifestyle community owners/operators? If so; or even ‘if not’, let Jay Zandman know of your interest, so as to be ‘first in line’ if and when that time arrives: (800) 211-0468 X 117 or jayz@manning-nozick.com.

When will 21st Mortgage Corporation’s C.A.S.H. Program be opened to other HUD – Code home manufacturers? It’s believed this would enhance the program’s attractiveness to land lease lifestyle community owners/operators with longstanding home manufacturer relationships elsewhere; and, be an obvious nod to ‘inter – manufacturer cooperation and, by extension, Industry Unity’. By the way, if no one has contacted you regarding you participating in the C.A.S.H. Program, let Lance Hull know via (865) 523-2120 X 1218, or email him your LLLCommunity information & needs: LanceHull@21stMortgage.com

When will the HUD – Code manufactured housing industry provide its’ homebuying customers, particularly those living in homes sited within land lease lifestyle communities (i.e. as site lessees), a viable secondary market, replete with market comparable valuations of their homes, a real time means of marketing and selling these homes, escrow closings, even the presence of trained and licensed professional sales staff? This question, like a few before it (e.g. national Advocacy and captive insurance) should be routine fodder at periodic national MHInitiative® gatherings of businessmen and women, paying their own way, to have a role shaping and effecting national policy and issues such as: viable secondary market, advocacy, captive insurance, and more. Which, of course raises this question: ‘When will MHIndustry leaders finally, for the first time since National State of the Asset Class caucuses (predecessor to MHInitiative® concept) were held in Tampa, FL. on 2/27/2008, and in Elkhart, IN., on 2/27/2009? What will YOU be doing on 2/27/2013? That’s one day after MHI’s annual Legislative Conference, in Arlington, VA., ends. Hmm. Would YOU be willing to remain there an extra day to raise, parse, and address some of the questions posed here, and others as well? I sure would! If you agree, phone our salaried national leaders at MHI: (703) 558-0678 or 0666; and, MHARR @ (202) 783-4087. Leave a message if necessary….

Why aren’t more owners/operators of small to mid – sized land lease lifestyle communities buying and seller – financing new HUD – Code homes on – site? Possible reasons: new homes priced too high for the local housing market (This is where home manufacturers need to learn, using Annual Gross Income & Annual Median Income figures, to calculate ‘affordable’, even ‘risky’ Price Points, on homes going into specific – defined by postal zip code – local housing markets!*1); real concerns about being compliant with the S.A.F.E. Act and other related finance regulatory measures; too much trouble ‘being all things to all people’, e.g. wholesale home buyer, marketer, seller, and seller – finance source; unfamiliarity with other options (e.g. lease – option, even leasing of homes as apartment units); and that rare, good working relationship with a local independent ‘street’ MHRetailer willing to sell new homes into LLLCommunities.

How can we, as an industry and realty asset class, effectively attract more private investors, interested in safe investments with yields attractive to them, as well as to land lease lifestyle community owners/operators, and our actual homebuyers?’ Perhaps this pithy question has a two-step answer. First; as a realty asset class, we must provide access to well – constructed Community Series Homes affordably priced, properly installed on fully serviced rental homesites in LLLCommunities owned and managed by individuals and firms committed to providing an ‘attractive value proposition to homebuyer/site lessees via rent rates in line with what the local housing market indicates’. AND secondly, perhaps the time has arrived (for us?) to create a new, national fund, to finance the purchase of new CSH model homes by reputable, qualified LLLCommunity owners/operators (i.e. Similar to existing P2P & P2B internet lending platforms). If you’re reading this, and are excited about the prospect of creating such a fund, contact Spencer Roane, MHM® via spencer@roane.com or via (678) 428-0212.

And the final questions of the hour are these: Are you, or your firm, direct, dues – paying members of the Manufactured Housing Institute (‘MHI’) and or its’ National Communities Council (‘NCC’) division, both Advocating in behalf our MHIndustry and the land lease lifestyle community realty asset class? If the answer is NO, then phone (703) 558-0666 in the first instance; and (703) 558-0678 in the latter instance, to converse with Dick Jennison and Jenny Hodge respectively. Tell ‘em ‘George sent me!’ And, if you’re reading this, and are a LLLCommunity owner/operator, and interested in the rare opportunity to be a Charter Member of the Manufactured Home Communities Association of North America, or MHCA in short, simply phone the aforementioned MHIndustry HOTLINE, and provide your contact information. Remember, the new, not for profit MHCA is being launched to continue the ‘statistical Research & comprehensive Resource servicing’ of land lease community owners/operators nationwide, and maybe Canada; services heretofore provided by GFA Management, Inc., dba PMN Publishing. NOTEs. It’s hoped and planned the MHCA will effectively complement national Advocacy efforts of and by MHI, as long as one group of NCC members (e.g. largest property portfolio ‘players’) don’t preempt legislative and regulatory concerns of small to mid – sized owners/operators of land lease lifestyle communities. And, if you’re wondering ‘Why didn’t MHI absorb aforementioned ‘statistical Research & comprehensive Resource servicing’ of LLLCommunities when given the opportunity, on two separate occasions? Ask them, when you phone to join as a direct, dues – paying member.

End Notes:

1. Easiest & best way to calculate ‘affordable’ & ‘risky’ Price Points for new & resale homes, of any type, to be sited within or outside LLLCommunities, is to use the ‘Ah Ha! & Uh Oh! Worksheet’, available FREE upon request, by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.